Anyone helped a relative buy their council house?

Naps

Hi,

I've searched to see if this had already been discussed but failed to find an answer - apologies if this has already been covered - any direction to previous threads would be appreciated.

This is my situation.

My parents have been council tenants for almost 50 years.
My Dad passed away a couple of weeks ago.
My Mum is retired (68 years old)
My Mum has very small savings (less than 10k) and will live on state pension, plus pension credits.

We're concerned that as a sole tenant there will no be pressure for her to move into something smaller, so we'd like to secure her home for her by funding the purchase of it (she would not be able to get a mortgage) - of course this benefits us, she is eligible for a 60% discount on the purchase price, and it gives us somewhere to stay when we visit.

It's our intention that she does not repay us any of the money, but that we would inherit the house eventually, with all other belongings/cash being split equally between me and my siblings. (We plan to put a will in place at the time of purchase).

Has anyone done this before? Is it as simple as transferring the money to the council at the time we have to pay for the house?

Does anyone have any idea what the tax implications are for this, would she have to pay tax on the money we provide?

From what I can see, her pension credits would not be affected, but she may have to pay council tax, something which she has not had to pay because of low earnings.

I know there's a risk that she will need to sell the property for her care in later years, and we're happy to take that risk.

Am I missing something, oversimplifying it?

Thanks for any advice.

RAS

Hi

Why do you think mum will be under pressure to move somewhere smaller?

What happens if she needs to go onto a care home and the house has to be sold before she dies?

Mojisola

She will become responsible for all maintenance and repairs. Are you going to be able to keep paying out for things like a replacement boiler/roof repairs/etc?

Werdnal

You will not be able to buy it in your own name as the RTB discount is your mother's and hers alone.

You will not be able to mortgage it as it will not be bought in your name.

If your mother is older and without much savings, why are you thinking of buying her a property that will require ongoing maintenance, repairs and updating, all currently financed by the council.

If there was some way to do this, and put the property in her name, and she needed residential care in future, the house would be sold to finance that, as you already know. I can see absolutely no benefit to your mother here in trying the make her a property owner at this late stage in her life.

Unless, of course, as many who come here purporting to be doing this for the "parent's" benefit, you are looking to secure the property as a reduced price so you can benefit from it in the future.

I would put your "tin hat" on for the rest of the afternoon, as some members take a very dim view of anyone trying to buy take advantage of their parent's RTB status, regardless of what plausible reasons you put down here.

The reason you may not be able to find many other threads on this topic, is that they tend to get very heated, and can be deleted!

bryanb

Is that now be pressure or not be pressure? 2nd paragraph post1

Naps

There's high demand for 3 bedroomed houses in her town, sole occupancy tenants are often asked to move to something smaller. Of course she can refuse.

As I mentioned, if the house has to be sold before she dies to fund a care home, that's a risk we're happy to take.

Better_Days

There have been quite a few threads on this topic eg here https://forums.moneysavingexpert.com/discussion/4453181

Have you considered how repairs and maintenance will be funded?

We looked at an ex LA property for sale recently and it was very sad. They had purchased the property years ago but did not have the funds to maintain it. There was no DG, no CH, very old kitchen, bathroom etc. Next door was still tenanted and the render had been done, roof replaced, windows replaced, in fact it looked smart and well maintained.

The vendors were elderly and stuck in unsuitable accomadation out in the sticks. They were both all wrapped up in jumpers as it was so cold. I felt very sorry for them, the property wont sell unless they drop the price considerably.

So do take into account the cost of ongoing maintence, new boiler etc.

The most important thing is what does your Mum want to do?

Werdnal

Why is your mother currently living alone in a 3 bed family home? I think she should move and make way for a family who actually need that property. Keeping the additional bedrooms just because you might want to stay is not a valid excuse.

In the long term, an exchange to a 1/2 bed council bungalow would be much better for her future, easier for her to look after and make it more likely she will be able to stay in her own home longer, than saddling her with an oversized home which she needs to heat and clean.

*Robin*

Naps wrote: »

My parents have been council tenants for almost 50 years.
My Dad passed away a couple of weeks ago.
My Mum is retired (68 years old)
My Mum has very small savings (less than 10k) and will live on state pension, plus pension credits.

Naps, condolences on the loss of your father.

I wonder whether you are considering moving into the house with your Mum, to provide care and companionship?

If not, then even if it were possible to buy the house for your Mum, it's probably not a good idea to saddle her with the responsibilities and costs of home-ownership at this stage in her life.

As has been said, get in touch with the council to ask about the possibility of Mum transferring to a smaller bungalow sooner rather than later.

Werdnal wrote:

Why is your mother currently living alone in a 3 bed family home? I think she should move and make way for a family who actually need that property. Keeping the additional bedrooms just because you might want to stay is not a valid excuse.

Werdnal shame on you! OP's father passed away a couple of weeks ago - now he is doing as a good son should; investigating the possibilities for making his bereaved Mum's latter years as comfortable and happy as possible.

As it happens he can't do what he's asked us about here. He didn't know, now he does. No need for your aggressive comment.

Werdnal

*Robin* wrote: »

Werdnal shame on you! OP's father passed away a couple of weeks ago - now he is doing as a good son should; investigating the possibilities for making his bereaved Mum's latter years as comfortable and happy as possible.

As it happens he can't do what he's asked us about here. He didn't know, now he does. No need for your aggressive comment.

There was nothing aggressive in my tone at all - read it again? I was suggesting what many other members here would - usually in far more acusatory and offensive language than this. There are many, many homeless families out there desperate for a 3 bed house. I have friend with 2 young girls who had to stay for 4 months in an emergency hostel, sharing a single room, with drunks and other undesirable characters coming and going at all hours, just because the council could not find anywhere for her family to move to.

If OP wants to do their best for their mother, they should find her a home to suit her needs. The original post seems to be making more inference that they want to buy the place for her when it is obviously much too large for her needs, and have the additional rooms to stay in when they visit. The council are not in the business for providing free accommodation to visitors.



OP, apologies if you have taken offense to my comments, which was not intended, but as I said earlier, be prepared for plenty of flak as this type of question tends to attract it.

Naps

Thanks Werdnal - and my apologies, perhaps this was not the forum to ask on if it offends people.

To clarify (although this may be pointless) the discount given by the right to buy agreement is to benefit my Mother, not us (apart from convenience/sentimental value - see below). Purchasing her home gives her something she would like but never thought she'd be able to own, it also gives her a property which we can adapt to her needs (she's already asked for new internal doors and French doors to the garden), and it gives her security in her old age, so that should she need it, she can sell the property and use the funds to go into the best care home possible (giving her full value funds of £125k is far better than our contribution of £55k).

I'm sure a lot of people who have posted before have done the math's and realised it's not actually a good financial investment to purchase a house for a relative and let them live rent free. We have, and are certain we will lose out financially by funding her home purchase in comparison to investing in a property where we could put paying tenants into, but she's my mother, it was my home and we are fortunate enough to have money in the bank.

The convenient/sentimental part where I do benefit - is that I secure my family home, and I get to take my children back year after year, to show them were I grew up. Of course, if my mother passes on, it makes sense that we get to keep the house - and although I'm unlikely to want to sell it, if I should - yes there is a chance that the difference between it's selling price and it's actual value at that time may match, or even be more than rent we could have earned (highly unlikely) - but on the flipside, we also know that the house may be sold long before to fund her care - and it's nice to know we can give her this security.

Do I still need a tin hat? Or is it possible to find out if being the owner of her property would affect her pension/pension credit.

If being on low income, yet a home owner would affect her council tax.

And finally, if it's possible to simply give her the money to buy the house, or if giving her £55k would cause problems.